If you’ve followed the supply chain for the past two years, you likely know it isn’t perfect.
It’s constantly adapting to its surroundings, and lately, it has been one of recovery. As the supply chain recovers, manufacturers, distributors, and consumers should be on the same page to keep things moving smoothly.
While we fix the supply chain, we can also find ways to improve it. New technology and initiatives are making it easier to find efficiencies, be more productive, and improve returns on investment (ROI).
We’ve identified eight trends we think will blossom in 2023 and can’t wait to see how distributors utilize their skills to stay ahead of the curve.
Workers will still be tough to find in 2023, but it won’t be a surprise anymore – if anything, we expect it. Supply chain technology can bridge the labor gap by making a business’ current staff more productive without adding more people or increasing workloads.
Robots and other automation have become more common across many industries, from Amazon’s self-controlled Proteus package carts to burger-flipping bots at Jack in the Box. We might not be at the point where Rosie the Robot is preparing our meals, but having a pair of helpful metal hands that don’t mind lifting heavy boxes is a boon for many warehouse workers.
Aside from needing fewer people to perform tasks, artificial intelligence helps manufacturers and distributors reduce errors, improve overall efficiency, and decrease accidents and injuries.
Augmented reality, on the other hand, opens up once local jobs to the world. Forklift drivers, for example, can work remotely using technology that puts them in the seat of a virtual machine, all while they sit comfortably in an office chair. Other machines can be rigged up with similar technology, opening the doors for companies to hire workers from a larger geographical radius than they could have a few years ago.
Kermit said it best; “It’s not easy being green.”
America’s favorite amphibian wasn’t talking about deadhead miles and costly packaging that keeps prices high and causes headaches for supply chain managers, but he has a point.
From better scheduling software and apps that make it easier to deliver full truckloads of finished products to right-size packaging to reduce the amount of space taken up by materials, being green starts with forward-thinking. It could be as small as finding ways to recycle products or sourcing more sustainable materials – any effort contributes to a greener supply chain strategy.
A few of the nation’s largest companies are also betting on solar, including Target, Apple, Walmart, and IKEA. By jumping on the solar bandwagon, businesses, including electrical distributors, can save money, reduce operating costs, and promote a cleaner environment by reducing their carbon footprints.
A flexible supply chain more easily absorbs disruptions and adapts quicker.
When manufacturers and distributors invest in IT infrastructure, it opens the door for innovative technology to seep in. Software as a Service (SaaS) products and integrated tech stacks can lighten the load on companies and ensure the latest software is in use.
Investing in IT resources may also prevent tech bloat caused by too many underused tools and is a necessary safeguard in the case of a hacking attempt.
Enterprise resource planning (ERP) systems create a single source of truth for companies to control everything associated with their operations, including finance, procurement, operations, supply chain, commerce, and manufacturing data.
An ERP eliminates duplicate data points to increase visibility and create a real-time picture of everything within the business. This information allows them to make better long-term forecasts, break down prior performance metrics, and proactively approach operations.
What does better communication look like? It comes in different forms, but when manufacturers, distributors, and consumers are working together, technology can keep the supply chain engine primed and running.
One example is implementing and utilizing a comprehensive inventory tracking system. At-a-glance inventory technology tracks stock and shipments, letting customers know if products are available while alerting manufacturers of upcoming replenishment orders.
Although plenty of communication options are available today, sometimes nothing beats picking up the phone and having a conversation. When manufacturers and distributions are in lockstep, nothing gets overlooked, KPIs are improved, and shortcomings get solved before becoming problems.
In Q1 ’22, global supply chain funding reached about $9.4 billion. The massive amount of logistical funding was down slightly from the previous quarter but was still the third-highest total recorded and miles above spending figures before the pandemic.
Unfortunately, the massive uptick in supply chain investments only came about after the pandemic shut down the global economy and thrust supply chain models into a tailspin.
Still, the pandemic allowed time for manufacturers and distributors to take a small step back to learn how their supply chains operate. The result has been a massive shift from rigid, one-size-fits-all models to dynamic supply chains that scale quickly and use streamlined approaches.
McKinsey and Co. notes that while a solid group of businesses will keep up with ongoing investments, others may slip back into older methods and eventually fall behind.
Customer intelligence is the art of using technology to understand a company’s customers and what they want. Ultimately, it lets you reach customers with more relevant messages and offer better experiences.
It’s also capable of helping businesses make better decisions, see what products are selling, identify stocking and inventory options, and determine how much space to devote to different products. Additionally, distributors and manufacturers maintain shorter shipping times to avoid delays and keep projects on track.
A strong customer intelligence program impacts the bottom line in multiple ways. It can improve ROI by allowing distributors to identify and carry more star products while preventing poor-selling and low-margin stock from taking up space.
With better planning and efficiency alongside distributors, manufacturers can improve their just-in-time stock, preventing a build-up of raw materials. They can also use customer intelligence to align with distributors to improve order accuracy and employee productivity.
For most people, the word “blockchain” only pops up when discussing cryptocurrency. However, people don’t realize blockchain technology is in many industries, including the supply chain.
Blockchain technology creates transparency and resiliency in the supply chain by forming a single source of truth for everyone involved. It features real-time visibility into every step, giving distributors, manufacturers, and others the power to pivot if they see a problem on the horizon.
Companies utilizing blockchain technology also avoid information silos. When everyone has visibility into the supply chain, it reduces missteps that lead to missed shipments, late arrivals, and angry customers. Each person has access to the same information in real-time, complete with audit trails, and the chain is difficult to hack due to cryptography.
Better planning often leads to more efficiency. It also lowers delivery costs and makes shipping times faster while preventing capacity issues from rearing their ugly heads.
Whether it’s an app to help truck drivers reduce deadhead miles and keep their trucks full or inventory tracking software that anticipates customer demand using historical data, tweaking our planning processes can have huge impacts. While the end goal is always to make the customers as happy as possible, it relies on maintaining good supplier relationships.
Understanding where efficiency lies makes it easier to stock the right products without overspending. It also reduces the likelihood of incorrect shipments, logistical errors, and wasted hours spent correcting problems.
Although these are only a few of the many trends we’re seeing, one thing is clear: technology plays a large role in supply chain management.
Working out the early kinks may open the door for innovators to see massive future cost savings and better revenue. Laggards, and those who decide to pull back on their technology investments, will likely find it harder to keep up.
The goal for 2023 and beyond is simple – find ways to communicate better and create efficiencies, then reap the rewards. The hope is that with better planning, the supply chain will boast fewer delays, waste less time moving smaller shipments, and cultivate more productive workers invested in success.
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